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The Situation

  • Michael K. Bergman
Chapter

Abstract

Access to information—and impediments to it—is a significant determinant of wealth and economic growth. Knowledge representation is a primary driver for using computers as a means to improve the economic well-being of all peoples. Solow, a student of Schumpeter, had the insight in two papers in the 1950s, for which he won a Nobel Prize, that technological change is the ‘residual’ leftover from empirical growth once we remove the traditional inputs of labor and capital, what we now call total factor productivity (TFP). Romer’s subsequent work internalized this factor as a function of information and knowledge, what in contrast became the endogenous growth model. Innovation and its grounding in knowledge had finally assumed its central, internal role in economists’ understanding of economic growth. The need to organize better and present information came with its increased volume. Unlike the historical and traditional ways of measuring assets—based on the tangible factors of labor, capital, land, and equipment—information is an intangible asset. We can define intangible assets as private expenditures on assets that are intangible and necessary to the creation and sale of new or improved products and processes, including brands, designs, software, blueprints, ideas, documents, know-how, artistic expressions, recipes, and the like. Some 25% of the annual trillions of dollars spent on information creation lend it to actionable improvements. If we are to improve our management and use of information, we need to understand how much value we routinely throw away.

Keywords

Economic growth Wealth Intangible assets Endogenous growth 

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Copyright information

© Springer Nature Switzerland AG 2018

Authors and Affiliations

  • Michael K. Bergman
    • 1
  1. 1.Cognonto CorporationCoralvilleUSA

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